OML 11: Court Orders Mohammadu Buhari to Renew Shell’s License

  • OML 11: Court Orders Mohammadu Buhari to Renew Shell’s License

A Federal High Court in Abuja has ordered President Mohammadu Buhari, who is also the Minister of Petroleum, to grant the renewal of Oil Mineral Lease (OML) 11 to Shell Petroleum Development Company (SPDC) over a 20-year period, in accordance with paragraph (13)1 of the Petroleum Act.

The presiding justice, Taiwo Taiwo in his ruling delivered on Friday cited paragraph 13 (1) of the Petroleum Act. He said that, since the company had met all necessary conditions required for renewal of the license, it is compulsory that a renewal be granted as required by the law; adding that there was no proof before him that the company has not met the conditions.

He said, “I, therefore, find that having fulfilled all obligations required for the renewal of Oil Mining Lease 11, including the payment of rent and royalties and having applied for the renewal of the lease in line with the law, the plaintiff should be granted the renewal”.

The judge also revealed that the plaintiffs; SPDC, had initially applied for a 30-year period when it sought for the court’s intervention on the disagreement with the Federal government over the OML 11 but he said that the law do not make provisions for that duration.

Regarding paragraph 10 of the Act he said, “I see no conflict in these paragraphs. I am of the view that what these paragraphs say is that a term of mining lease shall not exceed 20 years. This to me is mandatory.”

The two defendants in the suit; Minister of Petroleum Resources, President Mohammadu Buhari and Minister of State for Petroleum Resources had refused a renewal of the grant,  through the Ministry of Petroleum; the claim was that the size of oil field; 3,095sqkm, assigned to the OML is approximately three times the standard size of 1,295sqkm of an oil block. They also added that the Minister has the right to reject a grant renewal that threatens the security and sovereignty of the country.

The judge in his verdict said that, the defendants did not present any evidence to prove a threat to national security or sovereignty.

He adds, “The defendants are hereby compelled to grant the application for the OML 11 but it shall be in accordance with paragraph 10 of the first schedule to the Petroleum Act as regards the number of years stated therein and that there shall be no reduction in size of OML 11 as being contemplated by the defendants.”




About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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